Question 4.IP: Three years ago, T. Roderick organized Harbor Realty. At Jul......

Financial Accounting [EXP-43430]

Three years ago, T. Roderick organized Harbor Realty. At July 31, 2012, the end of the current fiscal year, the following end-of-period spreadsheet was prepared:

Instructions

1. Prepare an income statement, a statement of owner’s equity (no additional investments were made during the year), and a balance sheet.

2. On the basis of the data in the end-of-period spreadsheet, journalize the closing entries.

	A	B	C	D	E	F	G
1		Harbor Realty
2	End-of-Period Spreadsheet
3	For the Year Ended July 31, 2012
4		Unadjusted				Adjusted
5		Trial Balance Adjustments				Trial Balance
6	Account Title	Dr.	Cr.	Dr.	Cr.	Dr.	Cr.
7
8	Cash	3,425				3,425
9	Accounts Receivable	7,000		(e) 1,000		8,000
10	Supplies	1,270			(a) 890	380
11	Prepaid Insurance	620			(b) 315	305
12	Office Equipment	51,650				51,650
13	Accum. Depreciation		9,700		(c) 4,950		14,650
14	Accounts Payable		925				925
15	Unearned Fees		1,250	(f) 500			750
16	Wages Payable				(d) 440		440
17	T. Roderick, Capital		29,000				29,000
18	T. Roderick, Drawing	5,200				5,200
19	Fees Earned		59,125		(e) 1,000		60,625
20					(f) 500
21	Wages Expense	22,415		(d) 440		22,855
22	Depreciation Expense			(c) 4,950		4,950
23	Rent Expense	4,200				4,200
24	Utilities Expense	2,715				2,715
25	Supplies Expense			(a) 890		890
26	Insurance Expense			(b) 315		315
27	Miscellaneous Expense	$\underline{1,505}$	$\underline{ }$	$\underline{ }$	$\underline{ }$	$\underline{1,505}$	$\underline{ }$
28		$\underline{100,000}$	$\underline{100,000}$	$\underline{8,095}$	$\underline{8,095}$	$\underline{106,390}$	$\underline{106,390}$
29

Step-by-Step

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Harbor Realty Income Statement For the Year Ended July 31, 2012
Fees earned. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		$60,625
Expenses:
Wages expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$22,855
Depreciation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4,950
Rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4,200
Utilities expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2,715
Supplies expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	890
Insurance expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	315
Miscellaneous expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$\underline{1,505}$
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		$\underline{37,430}$
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		$\underline{\$ 23,195}$

Harbor Realty Statement of Owner’s Equity For the Year Ended July 31, 2012
T. Roderick, capital, August 1, 2011 . . . . . . . . . . . . . . . . . . . . .		$29,000
Net income for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$23,195
Less withdrawals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$\underline{5,200}$
Increase in owner’s equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		$\underline{17,995}$
T. Roderick, capital, July 31, 2012. . . . . . . . . . . . . . . . . . . . . . . .		$\underline{\$ 46,995}$

Harbor Realty Balance Sheet July 31, 2012
Assets			Liabilities
Current assets:			Current liabilities:
Cash . . . . . . . . . . . . . . . . . . . .	$3,425		Accounts payable . . . . . . . .	$925
Accounts receivable . . . . .	8,000		Unearned fees . . . . . . . . .	750
Supplies . . . . . . . . . . . . . . . . .	380		Wages payable . . . . . . . . . .	440
Prepaid insurance . . . . . . .	$\underline{305}$		Total liabilities . . . . . . . . . . .		$2,115
Total current assets . . . . .		$12,110
Property, plant, and equipment:
Office equipment . . . . . . . .	$51,650
Less accum. depreciation. . .	$\underline{14,650}$		Owner’s Equity
Total property, plant,			T. Roderick, capital . . . . .		$\underline{46,995}$
and equipment . . . . . . . . . . .		$\underline{37,000}$	Total liabilities and
Total assets . . . . . . . . . . . . . . .		$\underline{\$ 49,110}$	owner’s equity . . . . . . .		$\underline{\$ 49,110}$

Journal Page
Date		Description	Post. Ref.	Debit	Credit
		Closing Entries
2012 July	31	Fees Earned		60,625
		Income Summary			60,625
	31	Income Summary		37,430
		Wages Expense			22,855
		Depreciation Expense			4,950
		Rent Expense			4,200
		Utilities Expense			2,715
		Supplies Expense			890
		Insurance Expense			315
		Miscellaneous Expense			1,505
	31	Income Summary		23,195
		T. Roderick, Capital			23,195
	31	T. Roderick, Capital		5,200
		T. Roderick, Drawing			5,200